Silicon Valley labor market has best month in 13 years

The Bay Area job market boomed in August, adding 12,700 jobs for its best one-month performance since October 2012, state labor officials reported Friday.

Santa Clara County did even better, adding 8,500 jobs, the best one-month performance for the county in more than 13 years. Those gains accounted for two-thirds of the jobs added in the Bay Area and more than one-fourth of the jobs gained in California last month, this newspaper's analysis of data from the Employment Development Department shows.

"The South Bay knocked one out of the park in August," said Scott Anderson, chief economist with San Francisco-based Bank of the West.

The strong gains in August were a sharp contrast to July, when the Bay Area lost 4,400 jobs, sparking fears among some analysts that the region's economy had begun to sputter, and the rebound might falter.

The most recent results show that the tech sector, primarily in Silicon Valley, continues to serve as the foundation of a rebound that is gaining strength in a range of other industries across the Bay Area.

"The tech sector is definitely doing well," added Jordan Levine, director of economic research with Beacon Economics. "Companies are still investing in software, equipment, and intellectual property."

The East Bay, consisting of Alameda County and Contra Costa County, added 2,300 jobs in August, the EDD figures showed. The San Francisco-San Mateo-Marin region added 1,900.

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California added 29,100 jobs during August, labor officials reported Friday, in a second straight month of robust employment gains statewide. The statewide and Bay Area numbers were all adjusted for seasonal factors.

The statewide jobless rate worsened to 8.9 percent, the EDD reported, from 8.7 percent in July. That can occur because the jobs data and the jobless rate are compiled in separate surveys.

In contrast, unemployment rates improved throughout the Bay Area in August, according to a Beacon Economics analysis of the EDD figures.

The Alameda County-Contra Costa County jobless rate was 7.1 percent, versus 7.4 percent the month before. The Santa Clara County-San Benito County jobless rate was 6.6 percent, compared with 6.9 percent. The San Francisco-San Mateo-Marin August jobless rate was 5.3 percent, better than the month-before rate of 5.5 percent, the Beacon analysis showed.

During the one-year period that ended in August, job totals expanded by 1.9 percent in the Bay Area. The U.S. job market expanded by 1.6 percent and California by 1.5 percent over the same period.

"The Bay Area is growing more robustly than California and the nation as a whole," said Jon Haveman, chief economist with Marin Economic Consulting. And, he added, "it is creating more jobs with better wages" than the nation and the state.

The strongest industry in Santa Clara County during August was the tech-focused professional scientific and technical service sector, which gained 1,500 jobs. Another tech sector, information services and products, gained 900. But manufacturing added 1,200, administrative support was up 1,100, retail gained 800 and construction added 700 jobs, according to Beacon.

"Tech is still the economic engine for Santa Clara County, but the majority of the new jobs that were added were outside of tech," said Michael Bernick, a research fellow with the Milken Institute and a former director of the state EDD. "You are seeing real diversity in the Santa Clara County job market."

The strong gains during August aren't an anomaly, said Steve Levy, director of the Palo Alto-based Center for Continuing Study of the California Economy

"The trend in the Bay Area is real," Levy said. "Very strong job growth is building. You see expansion everywhere from San Jose to San Francisco, and now the East Bay has turned modestly positive. Because of tech, the Bay Area will continue to do well. You have Google (GOOG), Apple (AAPL), LinkedIn, Microsoft and other companies expanding their office space because they are hiring employees."

Contact George Avalos at 408-859-5167 or 408-373-3556. Follow him at Twitter.com/georgeavalos